Interview with Vitaly Nesis of Poymetal: It’s necessary to think faster, to do faster, to drill more and to steal less

After a sharp drop in demand for precious metals Russian miners start to think about the price level at which production can stop. Some Russian companies have secured themselves against crisis selling unprofitable assets or cutback of expensive projects.

General Director of Polymetal Int (which unites assets of Polymetal) Vitaly Nesis explains to the Kommersant-Khabarovsk that he is not an optimist in relation to prices, but a realist; he also assures that he won’t close enterprises if gold’s price is above $1 000 / oz.

Question: "It is clear that we are not optimists, but realists in relation to prices" - Vitaly Natanovich, now metal prices is a central issue for the entire industry. However, Polymetal continued to increase production volumes; did this insure you from the recession?

Answer: Unfortunately, the prices declined too much to compensate this fall by the increase in production. In 2013, the average price of gold fell by 24% as compared with 2012, and the silver price by 38%. It is clear that no matter how we tried, we can’t make such growth rates.

As for the further price situation – I should say that I can predict here not as the general director of the company, but just as the average man, because I don’t have any special information. I don’t expect anything good with the prices for precious metals in 2014. I guess that the recovery will happen only after the reduction of the world production of gold and silver.